Grill v. BAC Home Loans Servicing, LP et al, No. 2:2010cv03057 - Document 14 (E.D. Cal. 2011)
Court Description: ORDER granting 5 Motion to Dismiss signed by Judge Frank C. Damrell, Jr on 1/13/11: Plaintiff's claims are dismissed with leave to amend. Plaintiff is granted fifteen (15) days from the date of this order to file a first amended complaint in accordance with this order. Defendant is granted thirty (30) days from the date of service of plaintiff's first amended complaint to file a response thereto. (Kaminski, H)
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Grill v. BAC Home Loans Servicing, LP et al Doc. 14 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 STEVEN GRILL, CIV NO. 10-CV-03057-FCD/GGH 13 14 15 16 Plaintiff, v. MEMORANDUM AND ORDER BAC HOME LOANS SERVICING LP; Bank of America N.A.,; RECONTRUST COMPANY N.A.; and DOES 1-10, inclusive 17 18 Defendants. ____________________________/ 19 20 ----oo0oo---This matter is before the court on the motions of defendant 21 BAC Home Loans Servicing LP (“BAC”) to dismiss and to strike 22 plaintiff Steven Grill’s (“plaintiff”) Complaint pursuant to 23 Federal Rules of Procedure 12(b)(6) and 12(f). 24 BAC’s motions. Plaintiff opposes For the reasons set forth below,1 BAC’s motion to 25 26 27 28 1 Because oral argument will not be of material assistance, the court orders this matter submitted on the briefs. E.D. Cal. L.R. 230(g). 1 Dockets.Justia.com 1 dismiss is GRANTED.2 2 BACKGROUND 3 Plaintiff brought this action against BAC for conduct 4 arising out of a Home Affordable Modification Trial Period Plan 5 (the “Plan”) that BAC sent plaintiff on or about October 22, 6 2009. 7 Plaintiff alleges that BAC failed “to honor its agreement with 8 [p]laintiff to modify his mortgage and prevent foreclosure.” 9 (Id. ¶ 1) 10 (Compl., filed Oct. 12, 2010 [Docket # 1], ¶ 65.) Plaintiff claims the terms of the Plan state that if he met 11 all the requirements listed, BAC was obligated to provide him 12 with a modification of his current mortgage loan. 13 alleges that he met the terms of the Plan “by submitting the 14 required documentation and making payments.” 15 alleges that “[d]espite his efforts, [BAC] has ignored its 16 contractual obligation to permanently modify his loan.” 17 Plaintiff alleges that “[BAC’s] actions thwart the purpose of the 18 [United States Treasury’s Home Affordable Modification Program 19 (“HAMP”)] and are illegal under California law. (Id. ¶ 3.) (Id.) He Plaintiff (Id.) (Id. at 4.) 20 Plaintiff’s Complaint sets forth six causes of action: (1) 21 breach of contract based on the Plan; (2) breach of the implied 22 covenant of good faith and fair dealing; (3) breach of contract 23 based on plaintiff’s status as an intended third-party 24 beneficiary to the Servicer Participation Agreement (“SPA”); (4) 25 promissory estoppel; (5) violation of the Rosenthal Fair Debt 26 27 28 2 Because the court grants BAC’s motion to dismiss, it does not reach the motion to strike. Defendant’s motion to strike is DENIED as MOOT. 2 1 Collection Practices Act; and (6) unfair and fraudulent business 2 practices in violation of the California Unfair Competition Law, 3 California Business & Professions Code Sections 17200 et seq.. 4 STANDARDS 5 Under Federal Rule of Civil Procedure 8(a), a pleading must 6 contain “a short and plain statement of the claim showing that 7 the pleader is entitled to relief.” 8 S. Ct. 1937, 1949 (2009). 9 court, the complaint must “give the defendant fair notice of what See Ashcroft v. Iqbal, 129 Under notice pleading in federal 10 the claim is and the grounds upon which it rests.” 11 v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations 12 omitted). 13 liberal discovery rules and summary judgment motions to define 14 disputed facts and issues and to dispose of unmeritorious 15 claims.” 16 Bell Atlantic “This simplified notice pleading standard relies on Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002). On a motion to dismiss, the factual allegations of the 17 complaint must be accepted as true. 18 322 (1972). 19 every reasonable inference to be drawn from the “well-pleaded” 20 allegations of the complaint. 21 Schermerhorn, 373 U.S. 746, 753 n.6 (1963). 22 allege “‘specific facts’ beyond those necessary to state his 23 claim and the grounds showing entitlement to relief.” 24 550 U.S. at 570. 25 plaintiff pleads factual content that allows the court to draw 26 the reasonable inference that the defendant is liable for the 27 misconduct alleged.” 28 ///// Cruz v. Beto, 405 U.S. 319, The court is bound to give plaintiff the benefit of Retail Clerks Int’l Ass’n v. A plaintiff need not Twombly, “A claim has facial plausibility when the Iqbal, 129 S. Ct. at 1949. 3 1 Nevertheless, the court “need not assume the truth of legal 2 conclusions cast in the form of factual allegations.” 3 States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th 4 Cir. 1986). 5 allegations, “it demands more than an unadorned, the defendant- 6 unlawfully-harmed-me accusation.” 7 pleading is insufficient if it offers mere “labels and 8 conclusions” or “a formulaic recitation of the elements of a 9 cause of action.” United While Rule 8(a) does not require detailed factual Iqbal, 129 S. Ct. at 1949. A Twombly, 550 U.S. at 555; Iqbal, 129 S. Ct. at 10 1950 (“Threadbare recitals of the elements of a cause of action, 11 supported by mere conclusory statements, do not suffice.”). 12 Moreover, it is inappropriate to assume that the plaintiff “can 13 prove facts which it has not alleged or that the defendants have 14 violated the . . . laws in ways that have not been alleged.” 15 Associated Gen. Contractors of Cal., Inc. v. Cal. State Council 16 of Carpenters, 459 U.S. 519, 526 (1983). 17 Ultimately, the court may not dismiss a complaint in which 18 the plaintiff has alleged “enough facts to state a claim to 19 relief that is plausible on its face.” 20 (citing Twombly, 550 U.S. at 570). 21 failed to “nudge [his or her] claims across the line from 22 conceivable to plausible,” is the complaint properly dismissed. 23 Id. at 1952. 24 probability requirement, it demands more than “a sheer 25 possibility that a defendant has acted unlawfully.” 26 This plausibility inquiry is “a context-specific task that 27 requires the reviewing court to draw on its judicial experience 28 and common sense.” Iqbal, 129 S. Ct. at 1949 Only where a plaintiff has While the plausibility requirement is not akin to a Id. at 1950. 4 Id. at 1949. 1 In ruling upon a motion to dismiss, the court may consider 2 only the complaint, any exhibits thereto, and matters which may 3 be judicially noticed pursuant to Federal Rule of Evidence 201. 4 See Mir v. Little Co. of Mary Hosp., 844 F.2d 646, 649 (9th Cir. 5 1988); Isuzu Motors Ltd. v. Consumers Union of U.S., Inc., 12 F. 6 Supp. 2d 1035, 1042 (C.D. Cal. 1998). 7 ANALYSIS 8 A. 9 Defendant’s Exhibits Rule 201 permits a court to take judicial notice of an 10 adjudicative fact “not subject to reasonable dispute” because the 11 fact is either “(1) generally known within the territorial 12 jurisdiction of the trial court or (2) capable of accurate and 13 ready determination by resort to sources whose accuracy cannot 14 reasonably be question.” 15 take judicial notice of matters of public record, such as 16 pleadings in another action and records and reports of 17 administrative bodies. 18 1190, 1198 (9th Cir. 1988). 19 Fed. R. Evid. 201(b). The court can See Emrich v. Touche Ross & Co., 846 F.2d “Even if a document is not attached to a complaint, it may 20 be incorporated by reference into a complaint if the plaintiff 21 refers extensively to the document or the document forms the 22 basis of the plaintiff’s claim.” 23 F.3d 903, 908 (9th Cir. 2003). 24 document, and the district court may treat such a document as 25 part of the complaint, and thus may assume that its contents are 26 true for purposes of a motion to dismiss under Rule 12(b)(6).” 27 Id. 28 plaintiffs “from surviving a Rule 12(b)(6) motion by deliberately United States v. Ritchie, 342 “The defendant may offer such a The policy concern underlying the rule is to prevent 5 1 omitting references to documents upon which their claims are 2 based.” Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th Cir. 1998). 3 BAC requests the court to take judicial notice of various 4 documents, including (1) the Note signed by plaintiff (Ex. A), 5 (2) the original deed of trust signed by plaintiff (Ex. B), and 6 (3) the Home Affordable Modification Trial Period Plan (Ex. C). 7 Plaintiff’s claims for relief depend upon, and/or repeatedly 8 refer to, information contained in Exhibit C. 9 ¶¶ 3, 65, 66, 75, 76, 77, 79, 80, 82, 83, 97, 98, 99, 110, 114, (See, e.g., Compl. 10 Prayer ¶ 5). 11 public record. 12 of plaintiff’s claims for relief, the court takes judicial notice 13 of these documents. 14 A, B, and C as part of the complaint and will assume that their 15 contents are true for purposes of the motion to dismiss. 16 Ritchie, 342 F.3d at 908. 17 B. 18 In addition, Exhibit A and Exhibit B are matters of Because these exhibits form the basis of several Accordingly, the court will treat exhibits See Breach of Contract Based on Trial Period Plan Plaintiff’s first claim for relief alleges that defendant 19 BAC breached the terms of the Plan. 20 alleges that he performed the terms and conditions of the Plan by 21 providing the requested documents and making trial period 22 payments for three successive months and seven months after the 23 final trial period payment. 24 that BAC “breached the [Plan] by failing to offer [p]laintiff a 25 permanent HAMP modification after payment of the trial period 26 payments.” 27 arguing that no binding contract existed. 28 Dismiss (“MTD”), filed Nov. 19, 2010 [Docket # 5], at 6.) (Compl. ¶ 77.) Specifically, plaintiff (Compl. ¶ 67.) Plaintiff alleges BAC moves to dismiss the claim 6 (Def.’s Mot. to 1 “[T]o state a claim for breach of contract, the plaintiff 2 must plead: 1) the existence of the contract; 2) plaintiff’s 3 performance or excuse for nonperformance of the contract; 3) 4 defendant’s breach of the contract; and 4) resulting damages.” 5 Armstrong Petrol. Corp. v. Tri Valley Oil & Gas Co., 116 Cal. 6 App. 4th 1375, 1391 n. 6 (2004) (emphasis added). 7 settled under California law “that there is no contract until 8 there has been a meeting of the minds on all material points.” 9 Banner Entm’t, Inc. v. Superior Court of Los Angeles County, 62 It is well 10 Cal. App. 4th 348, 357, 357-58 (1998) (emphasis removed). 11 Further, when it is clear that the proposed written contract 12 would become operative only when signed by the parties, the 13 failure to sign the agreement means no binding contract was 14 created. 15 Inc., 211 Cal. App. 3d 1555, 1562 (1989)). 16 Id. at 358 (citing Beck v. Am. Health Group Int’l, On a motion to dismiss, the court need not accept 17 allegations as true if they are contradicted by documents before 18 the court. 19 (9th Cir. 2001). 20 pleading and properly incorporated therein by reference, the 21 court may examine the exhibit and treat the pleader’s allegations 22 of its legal effect as surplusage.” 23 123 Cal. App. 4th 1057, 1064 (2004) (quoting Lumbermens Mut. Cas. 24 Co. v. Vaughn, 199 Cal. App. 3d 171, 178 (1988)). 25 Sprewell v. Golden State Warriors, 266 F.3d 979, 988 “[W]hen a written instrument is attached to the Burnett v. Chimney Sweep, Plaintiff’s allegations fail to sufficiently allege a 26 binding contract between plaintiff and BAC regarding a loan 27 modification. 28 existed between BAC and himself is contradicted by BAC’s Indeed, plaintiff’s claim that a binding contract 7 1 exhibits. 2 provides: “If I am in compliance with this Trial Period Plan. . . 3 then the Servicer will provide me a . . . Modification Agreement 4 that would amend. . . the Loan Documents.” 5 Notice (“RJN”), filed Nov. 19, 2010 [Docket #6], Exh. C, § 1) 6 (emphasis added).) 7 further provides in pertinent part: “I understand that the Plan 8 is not a modification of the Loan Documents and that the Loan 9 Documents will not be modified unless and until (i) I meet all of In the first sentence of BAC’s Exhibit C, the document (Request for Judicial Section 2, titled “The Trial Period Plan,” 10 the conditions required for modification, (ii) I receive a fully 11 executed copy of a Modification Agreement. . . . 12 understand and agree that the Servicer will not be obligated or 13 bound to make any modification of the Loan Documents if I fail to 14 meet any one of the requirements under this Plan.” 15 C, § 2(G) (emphasis added).) 16 Modification,” provides in pertinent part: “If I comply with the 17 requirements in Section 2 and . . . Section 1, the Servicer will 18 [determine the new payment amount and] send me a Modification 19 Agreement for my signature which will modify my Loan Documents. . 20 . . 21 and me, this Plan shall terminate and the Loan Documents, as 22 modified by the Modification Agreement, shall govern the terms 23 between the Servicer and me.” 24 added). 25 I further (Id. at Ex. Finally, Section 3, titled “The Upon execution of a Modification Agreement by the Servicer (Id. at Ex. C, § 3) (emphasis Accordingly, Exhibit C makes clear that providing the 26 requested documents was simply a part of the application process, 27 which plaintiff was willing to complete in the hope that BAC 28 would modify his loan. Under the language of Exhibit C, a 8 1 binding modification would not result unless and until BAC 2 determined that plaintiff complied with the requirements. 3 so determined, then it would send plaintiff a modification 4 agreement, including a new monthly payment amount, which both 5 plaintiff and defendant would execute. 6 If BAC Plaintiff has not alleged or provided exhibits (1) that BAC 7 determined plaintiff had met the requirements or (2) that BAC 8 sent plaintiff a loan modification with a new monthly payment 9 that was then executed by both plaintiff and BAC. As such, no 10 binding contract has been alleged and BAC’s motion to dismiss 11 plaintiff’s breach of contract claim is GRANTED with leave to 12 amend.3 13 C. 14 Breach of Implied Covenant of Good Faith and Fair Dealing Plaintiff’s second claim for relief asserts that BAC 15 breached the implied covenant of good faith and fair dealing. 16 Plaintiff’s claim is based on the same assertions set forth under 17 his breach of contract claim; namely, that BAC breached the 18 implied covenant of good faith and fair dealing by “[f]ailing to 19 perform loan servicing functions consistent with its 20 responsibilities to plaintiff . . . , [f]ailing to properly 21 supervise its agents and employees . . . , [f]ailing to 22 permanently modify loans and/or provide alternatives to 23 foreclosure . . ., and [m]aking inaccurate calculations and 24 3 25 26 27 28 Plaintiff also alleges breach of oral contract. However, plaintiff’s Complaint fails to set forth any facts relating to when such an oral contract was made, with whom, and under what terms. Plaintiff further fails to address the viability of any oral agreement in his opposition. Accordingly, defendant’s motion to dismiss plaintiff’s breach of contract claim arising out of any alleged oral agreement is GRANTED with leave to amend. 9 1 determinations of plaintiff’s eligibility for trial or permanent 2 modification.” (Compl. ¶ 83.) 3 “To establish a breach of an implied covenant of good faith 4 and fair dealing, a plaintiff must establish the existence of a 5 contractual obligation, along with conduct that frustrates the 6 other party’s rights to benefit from the contract.” 7 PNC Fin. Servs. Group, Inc., 642 F. Supp. 2d 1012, 1021-22 (N.D. 8 Cal. 2009) (emphasis added). 9 covenant of good faith and fair dealing involves something beyond Fortaleza v. Further, “a breach of the implied 10 breach of the contractual duty itself.” 11 Pac. Bus. Credit, Inc., 222 Cal. App. 3d 1371, 1394 (1990). 12 “implied covenant of good faith and fair dealing is limited to 13 assuring compliance with the express terms of the contract, and 14 cannot be extended to create obligations not contemplated by the 15 contract.” 16 4th 1089, 1093-1094 (2004). 17 Careau & Co. v. Sec. The Pasadena Live, LLC v. City of Pasadena, 114 Cal. App. Because the court has concluded that plaintiff has not 18 sufficiently alleged the existence of a binding modification 19 agreement, BAC’s motion to dismiss plaintiff’s claim for breach 20 of the implied covenant of good faith and fair dealing is GRANTED 21 with leave to amend. 22 D. Breach of Contract Based on Intended Third-Party Beneficiary Status to the SPA 23 24 Plaintiff’s third claim for relief alleges that he is an 25 intended third-party beneficiary of the SPA between BAC and 26 Fannie Mae and that BAC breached the terms of the SPA. 27 ¶¶ 89, 93). 28 under its SPA contracts in a manner which directly impacts (Compl. Plaintiff asserts that “[BAC] failed to perform 10 1 [p]laintiff.” 2 that he “is an intended third-party beneficiary sufficient to 3 expect that his loan would be ‘considered’ for modification under 4 HAMP rules.” 5 arguing that plaintiff “does not have standing to enforce the 6 SPA, and the SPA does not require that [BAC] modify [plaintiff’s] 7 loan.” 8 9 (Compl. ¶ 92). (Opp.’n at 12.) Specifically, plaintiff argues BAC moves to dismiss this claim (MTD at 13). The SPA is “governed by and construed under Federal law.” (Compl. Exh. entitled “Commitment to Purchase Financial 10 Instrument and Servicer Participation Agreement” [hereinafter 11 “SPA”] § 11(A)). 12 Restatement of Contracts guides the Ninth Circuit. 13 Water Users Protective Ass’n v. Patterson, 204 F.3d 1206, 1210-11 14 (9th Cir. 2000). 15 “must show that the contract was made for its direct benefit - 16 that it is an intended beneficiary of the contract.” 17 (citing Williams v. Fenix & Scisson, Inc., 608 F.2d 1204,1208 18 (9th Cir. 1979)). 19 between intended and incidental beneficiaries and explains: 20 21 22 23 With regard to third-party beneficiaries, the See Klamath To recover under a contract, a third party Id. at 1210 The Restatement of Contracts distinguishes (1) Unless otherwise agreed between promisor and promisee, a beneficiary of a promise is an intended beneficiary if recognition of a right to performance in the beneficiary is appropriate to effectuate the intention of the parties and . . . (b) the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance. 24 25 (2) An incidental beneficiary is a beneficiary who is not an intended beneficiary. 26 Restatement (Second) of Contracts § 302 (1979) (“Restatement”). 27 28 “To sue as a third-party beneficiary of a contract, the third party must show that the contract reflects the express or 11 1 implied intention of the parties to the contract to benefit the 2 third party.” 3 questions turns on “whether the beneficiary would be reasonable 4 in relying on the promise as manifesting an intention to confer a 5 right on him or her.” 6 d.). 7 Klamath, 204 F.3d at 1211. More specifically, the Id. (citing Restatement § 302(1)(b) cmt. “Parties that benefit from a government contract are 8 generally assumed to be incidental beneficiaries, and may not 9 enforce the contract absent a clear intent to the contrary. 10 Government contracts often benefit the public, but individual 11 members of the public are treated as incidental beneficiaries 12 unless a different intention is manifested.” Id. at 1211 13 (internal citations and quotations omitted). The Ninth Circuit 14 has noted that “this ‘clear intent’ hurdle is not satisfied by a 15 contract’s recitation of interested constituencies, vague 16 hortatory pronouncements, statements of purpose, explicit 17 reference to a third party, or even a showing that the contract 18 operates to the third parties’ benefit and was entered into with 19 them in mind.” 20 F.3d 1237, 1244 (9th Cir. 2009) (internal citations and 21 quotations omitted). 22 contract must demonstrate a clear intent to rebut the presumption 23 that the third parties are merely incidental beneficiaries. 24 County of Santa Clara v. Astra U.S.A., Inc., 588 Instead, the precise language of the Id. In the present case, the documents attached to plaintiff’s 25 Complaint demonstrate that plaintiff is an incidental third-party 26 beneficiary. 27 entered into in part for the benefit of qualified borrowers, the 28 language of the SPA does not support the conclusion that BAC and Although the SPA between BAC and Fannie Mae was 12 1 Fannie Mae intended to grant qualified borrowers the right to 2 enforce agreement. 3 Agreement shall inure to the benefit of and be binding upon the 4 parties to the Agreement and their permitted successor-in- 5 interest.” 6 Section 11E of the SPA states that “[t]he (SPA, §11E.) The Ninth Circuit has held that similar language did not 7 manifest the parties’ intent to grant third parties the right to 8 enforce the contract. 9 group of irrigators attempted to assert third-party beneficiary Klamath 204 F.3d at 1212. In Klamath, a 10 status to a contract between the United States and a dam 11 operator. 12 Id. at 1210. Article 15 of the contract provided: This contract binds and inures to the benefit of the parties hereto, their successors and assigns, including without limitation any water users’ organization or similar group which may succeed either by assignment or by operation of law to the rights of the United States hereunder. 13 14 15 16 Id. 17 contract did not “give the [i]rrigators any rights besides those 18 of incidental beneficiaries, because they have not succeeded, 19 either by assignment or operation of law, to the rights of the 20 United States. 21 entered into with the irrigators in mind, the court reasoned that 22 allowing the irrigators intended third-party status would extend 23 to all persons receiving a benefit from the dam, a result not 24 intended by the parties to the contract. 25 case, as in Klamath, the SPA was entered into with qualified 26 borrowers in mind but the language of the contract does not 27 manifest a clear intent by the parties to grant qualified 28 borrowers the right to enforce the Agreement. The Ninth Circuit concluded that the language of the Id. While acknowledging that the contract was 13 Id. Similarly, in this 1 The majority of district courts in the Ninth Circuit have 2 likewise concluded that qualified borrowers cannot reasonably 3 rely on an alleged manifested intent to confer rights upon them 4 since the SPA does not require that BAC modify all eligible 5 loans. 6 1025 AG (Opx), 2010 WL 3859069 (C.D. Cal. Sept. 27, 2010); Wright 7 v. Bank of America, N.A., No. CV 10-01723 JF (HRL), 2010 WL 8 2889117 (N.D. Cal. July 22, 2010); Hoffman v. Bank of America, 9 N.A., No. C 10-2171 SI, 2010 WL 2635773 (N.D. Cal. June 30, See Hammonds v. Aurora Loan Services, LLC, No. EDCV 10- 10 2010); Simmons v. Countrywide Home Loans, Inc., No. 09cv1245 11 JAH(JMA), 2010 WL 2635220 (S.D. Cal. June 29, 2010); Zendejas v. 12 GMAC Wholesale Mortgage Corp., No. 1:10-CV-00184 OWW GSA, 2010 WL 13 2629899 (E.D. Cal. June 29, 2010); Marks v. Bank of America, 14 N.A., No. 03:10-cv-08039-PHX-JAT, 2010 WL 2572988 (D. Ariz. June 15 22, 2010); Lucero v. Countrywide Bank, N.A., No. 09cv1742 BTM 16 (BLM), 2010 WL 1880649 (S.D. Cal. May 10, 2010); Escobedo v. 17 Countrywide Home Loans, Inc., No. 09cv1557 BTM (BLM), 2009 WL 18 4981618, at *3 (S.D. Cal. Dec. 19, 2009); but see Marques v. 19 Wells Fargo Home Mortgage, Inc., No. 09-cv-1985-L(RBB), 2010 WL 20 3212131 (S.D. Cal. Aug. 12, 2010); Reyes v. Saxon Mortgage 21 Services, Inc., No. 09cv1366 DMS (WMC), 2009 WL 3738177 (S.D. 22 Cal. Nov. 5, 2009). 23 SPA only requires that BAC consider plaintiff’s loan for 24 modification. Rather, these courts have concluded that the See Escobedo, 2009 WL 4981618, at *6. 25 Accordingly, BAC’s motion to dismiss plaintiff’s claim for 26 breach of contract based on the SPA is GRANTED without leave to 27 amend. 28 ///// 14 1 2 E. Promissory Estoppel Plaintiff’s fourth claim for relief asserts that BAC “made a 3 representation to [p]laintiff that if he agreed to the terms of 4 [the Plan], . . . he would receive a permanent HAMP 5 modification.” 6 relied on BAC’s alleged modification promise “to his detriment . 7 . . and has lost the opportunity to fund other strategies to deal 8 with his default and to avoid foreclosure.” 9 moves to dismiss plaintiff’s promissory estoppel claim asserting 10 that “[p]laintiff would not be offered a modification unless and 11 until [p]laintiff met all conditions required for modification.” 12 (MTD at 18.) 13 detrimental reliance because “[h]ad plaintiff not made any trial 14 payments, he would not have been able to fund other options, as 15 he was still obligated to make his normal monthly payments, which 16 exceeded the reduced payments he made under the Trial Period 17 Plan.” 18 (Compl. ¶ 97.) Plaintiff further asserts that he (Id. ¶ 99.) BAC BAC further asserts that plaintiff fails to allege (Id.) (emphasis removed). Under California law, a cause of action for promissory 19 estoppel requires that plaintiff show “(1) a clear promise, (2) 20 reliance, (3) substantial detriment, and (4) damages measured by 21 the extent of the obligation assumed and not performed.” 22 Royal Mobilehome Owners Assn. v. City of Poway, 149 Cal. App. 4th 23 1460, 1471 (2007) (citations omitted). 24 promise which the promisor should reasonably expect to induce 25 action or forbearance on the part of the promisee or a third 26 person and which does induce such action or forbearance is 27 binding if injustice can be avoided only by enforcement of the 28 promise.” Poway Under this doctrine, “a Kajima/Ray Wilson v. Los Angeles County Metro. Transp. 15 1 Auth., 23 Cal. 4th 305, 310 (2000) (quoting Restatement (Second) 2 of Contracts, § 90(1) (1981)). 3 Plaintiff fails to sufficiently allege a claim for 4 promissory estoppel. 5 plaintiff’s breach of contract claim, BAC made no promise to 6 provide plaintiff a permanent modification evidenced by BAC’s 7 exhibits. 8 plaintiff on notice that issuance of a loan modification was not 9 guaranteed by simply sending in the requested documentation and First, as set forth in the analysis of Rather, the plain terms of Exhibit C expressly placed 10 making trial period payments. 11 provides that the modification was conditioned on BAC’s 12 determination that plaintiff’s information complied with the 13 Plan’s requirements. 14 it send plaintiff a modification agreement which both plaintiff 15 and BAC must have executed. 16 express promise to modify plaintiff’s loan. 17 Indeed, the language of Exhibit C If BAC found that it did, only then would (RJN Exh. C.) As such, BAC made no Second, plaintiff’s complaint does not sufficiently allege 18 substantial detriment. 19 BAC’s alleged promise to modify his loan was to his detriment 20 because he lost the opportunity to pursue other strategies and 21 fund those strategies to deal with his default and avoid 22 foreclosure. 23 substantiate this conclusory allegation with sufficient facts. 24 Even if plaintiff had not paid the reduced payments, he would 25 have been obligated to pay the full amount of the mortgage 26 because the Plan states that “all terms and provisions [of the 27 Note and Mortgage]. . . remain in full force.” 28 Section 4 ¶ D.) Plaintiff alleges that his reliance on (Compl. ¶ 99.) However, plaintiff fails to (RJN Exh. C at In addition, plaintiff admits that as of January 16 1 2009, he “could no longer pay the full mortgage payment due to 2 his reduced earnings.” 3 plaintiff’s other alleged opportunities were sacrificed in order 4 to comply with BAC’s requests. 5 plaintiff has alleged substantial detriment on the purported 6 promise. 7 (Compl. ¶ 58.) Thus, it is unclear how As such, the court cannot find Accordingly, BAC’s motion to dismiss plaintiff’s claim for 8 promissory estoppel is GRANTED with leave to amend. 9 F. 10 Rosenthal Fair Debt Collection Practices Act Plaintiff’s fifth claim for relief alleges that BAC violated 11 California’s Rosenthal Fair Debt Collection Practices Act 12 (“RFDCPA”). 13 California’s nonjudicial foreclosure statute specifically exempts 14 from the RFDCPA trustees conducting a trustee sale and because no 15 similar exemption is made for lenders and servicers, “such actors 16 may be held liable for any unlawful debt collection activities 17 during foreclosure.” 18 plaintiff’s RFDCPA claim asserting that plaintiff “does not 19 allege any debt under the meaning of the RFDCPA[,] . . . and the 20 claim does not specifically allege any false, deceptive, or 21 unfair means.” 22 (Compl. ¶¶ 102-104.) Plaintiff argues that because (Opp’n at 13.) BAC moves to dismiss (MTD at 19.) The RFDCPA precludes a debt collector from collecting or 23 attempting to collect from a debtor on a consumer debt in a 24 threatening or harassing manner. 25 seq. (West 2010). 26 obscenity, misleading or false communications, and overreaching 27 by debt collectors. 28 defines a debt collector as “any person who in the ordinary See Cal. Civ. Code § 1788 et Specifically, the RFDCPA prohibits threats, Id. §§ 1788.10-.12, 1788.14-.16. 17 The RFDCPA 1 course of business, regularly, on behalf of himself or herself or 2 others, engages in debt collection.” 3 Id. § 1788.2(c). Numerous courts within the Ninth Circuit have concluded that 4 foreclosure pursuant to a deed of trust is not the collection of 5 a debt within the meaning of the RFDCPA. 6 Servicing, Inc., 680 F. Supp. 2d 1218, 1224 (E.D. Cal. 2010); 7 Izenberg v. ETS Servs., LLC, 589 F. Supp. 2d 1193, 1199 (C.D. 8 Cal. 2008); see Wilson v. JPMorgan Chase Bank, NA., No. CIV. 9 2:09-863 WBS GGH, 2010 WL 2574032, *10 (E.D. Cal. June 25, 2010); 10 Chernik v. Bank of America Home Loans, No. 2:09-cv-02746 JAM-DAD, 11 2010 WL 3269797, *3 (E.D. Cal. Aug. 18, 2010); Ricon v. 12 Recontrust Co., No. 09-937, 2009 WL 2407396, at *4 (S.D.Cal. Aug. 13 4, 2009) (dismissing with prejudice plaintiff's unfair debt 14 collection claims in foreclosure case); Pittman v. Barclays 15 Capital Real Estate, Inc., No. 09-0241, 2009 WL 1108889, at *3 16 (S.D. Cal. Apr. 24, 2009) (dismissing with prejudice plaintiff's 17 Rosenthal Act claim in foreclosure case because a “residential 18 mortgage loan does not qualify as a ‘debt’ under the statute”); 19 Gallegos v. Recontrust Co., No. 08-2245, 2009 WL 215406, at *3 20 (S.D. Cal. Jan. 28, 2009) (dismissing RFDCPA claim in foreclosure 21 case). 22 concluded that in mirroring certain provisions of the Federal 23 Debt Collection Practices Act (“FDCPA”), a mortgage servicing 24 company or any assignee of the debt is not considered a “debt 25 collector” under the RFDCPA. 26 (citing Nool v. HomeQ Servicing, 653 F. Supp. 2d 1047, 1053 (E.D. 27 Cal. 2009); Olivier v. NDEX West, LLC, No. 1:09-CV-00099 OWW GSA, 28 2009 WL 2486314, at *3 (E.D. Cal. Aug. 10, 2009); Cordova v. Lal v. American Home Further, several courts within this Circuit have also Lal, 680 F. Supp. 2d at 1224 18 1 America’s Servicing Co., No. C 08-05728 SI, 2009 WL 1814592, at 2 *2 (N.D. Cal. June 24, 2009). 3 Plaintiff’s complaint alleges that “[BAC] is a ‘debt 4 collector’ within the meaning of [the RFDCPA].” 5 Under prevailing law among California district courts, defendant 6 BAC cannot be liable for such conduct under the RFDCPA because 7 the foreclosure is not a debt and BAC is not a debt collector 8 within the meaning of the statute. 9 motion to dismiss plaintiff’s fifth claim for relief for 10 violations of the RFDCPA is GRANTED with leave to amend. 11 G. 12 (Compl. ¶ 102.) Accordingly, the defendant’s California Business & Professions Code § 17200 In his sixth claim for relief, plaintiff alleges that BAC 13 violated § 17200 of the California Business and Professions Code 14 (“UCL”) by using unfair and fraudulent business practices. 15 (Compl. ¶ 108.) 16 contending that plaintiff does not sufficiently “allege[] any 17 predicate unlawful, unfair, or fraudulent acts.”4 18 BAC moves to dismiss plaintiff’s UCL claim (MTD at 20.) UCL forbids acts of unfair competition, which includes “any 19 unlawful, unfair or fraudulent business act or practice.” 20 Bus. & Prof. Code § 17200. 21 treats violations of those laws as unlawful business practices 22 independently actionable under state law.” 23 1st Mortg., 583 F. Supp. 2d 1090, 1098 (N.D. Cal. 2008); see also Cal. UCL “incorporates other laws and Plascencia v. Lending 24 25 26 27 28 4 Defendant also moves to dismiss on the basis that plaintiff has not sufficiently alleged loss of money or property, and thus, does not have standing to sue. (MTD at 20.) Because the court concludes that plaintiff has not stated a viable claim based on the factual allegations regarding defendant’s conduct, the court does not reach the merits of whether plaintiff has sufficiently alleged loss of money or property. 19 1 Farmers Ins. Exch. v. Superior Court, 2 Cal. 4th 377, 383 (1992). 2 “California’s UCL has a broad scope that allows for ‘violations 3 of other laws to be treated as unfair competition that is 4 independently actionable’ while also ‘sweep[ing] within its scope 5 acts and practices not specifically proscribed by any other 6 law.’” 7 Cir. 2009) (internal citations omitted). 8 any federal, state, or local law may serve as the basis for a UCL 9 claim.” 10 Hauk v. JP Morgan Chase Bank U.S.A., 552 F.3d 1114 (9th “Violation of almost Plascencia, 583 F. Supp. 2d at 1098 (citing Saunders v. Superior Court, 27 Cal. App. 4th 832, 838-839 (1994)). 11 Because plaintiff’s UCL claim against BAC is predicated on 12 facts supporting his breach of contract, breach of the implied 13 covenant of good faith and fair dealing, promissory estoppel, and 14 violation of the RFDCPA claims, all of which the court has 15 dismissed, the defendant’s motion to dismiss plaintiff’s sixth 16 claim for relief for violations of California Business & 17 Professions Code § 17200 is GRANTED with leave to amend. 18 CONCLUSION 19 For the foregoing reasons, BAC’s motion to dismiss is 20 GRANTED. 21 Plaintiff is granted fifteen (15) days from the date of this 22 order to file a first amended complaint in accordance with this 23 order. 24 service of plaintiff’s first amended complaint to file a response 25 thereto. 26 ///// 27 ///// 28 ///// Plaintiff’s claims are dismissed with leave to amend. Defendant is granted thirty (30) days from the date of 20 1 2 IT IS SO ORDERED. DATED: January 13, 2011 3 4 FRANK C. DAMRELL, JR. UNITED STATES DISTRICT JUDGE 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 21
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